Money Basics
Money you earn from working
What is income?
A unit of ownership in a company
What is a stock (or share)?
Putting money in a bank for safety
What is saving?
A market where prices are rising
What is a bull market?
Not putting all your money into one investment
What is diversification?
Money you spend regularly
What are expenses?
Where stocks are bought and sold
What is the stock market?
Using money to try to grow it over time
What is investing?
A market where prices are falling
What is a bear market?
Holding investments for many years to reduce short-term risk
What is long-term investing?
Money left after expenses
What are savings?
This company makes the iPhone
What is Apple?
The chance of losing money when investing
What is risk?
The severe global downturn that began in 1929
What is the Great Depression?
Buying and selling stocks frequently to make short-term profit
What is trading?
A plan that tracks income and expenses over time
What is a budget?
If you own stock in a company, you are one of these
What is a shareholder?
The money you earn from an investment, usually shown as a percentage
What is a return (or rate of return)?
The crisis in 2008 largely caused by problems in this market
What is the housing market (or subprime mortgage market)?
A mix of different investments owned by one person
What is a portfolio?
When expenses are greater than income, this can happen
What is going into debt (or running a deficit)?
This index tracks 500 large U.S. companies and is used to measure market performance
What is the S&P 500?
This concept means earning returns on both your original money and previous gains over time
What is compound interest?
A rapid and widespread drop in stock prices, often caused by panic selling
What is a market crash?
This strategy spreads investments across different assets to balance risk and reward
What is a diversified portfolio (or asset allocation)?